Detroit Regional Convention Facility Authority (DRCFA) Saving State Taxpayers $74.7 Million; Encouraged by Cobo Center’s Financial Progress
Detroit – February 26, 2018 – The Detroit Regional Convention Facility Authority (DRCFA) announced today that it is encouraged by Cobo Center’s financial progress and through the DRCFA’s effective management of financial resources, the DRCFA is saving the state’s taxpayers an estimated $74.7 million since its inception in 2009. The City of Detroit and individual municipalities across the state are also benefitting from this financial structure, saving them millions of dollars.
“The Authority takes the legislative mandate seriously and has implemented strategies, procedures and quality standards to insure growth and prosperity of the Center,” said Larry Alexander, Chairman of the Board, DRCFA. “Our goal is to ensure we have a convention center that meets the demands of our customers, provides a sense of pride for our residents, and ensures a return on the investment made by the taxpayers of the state and our bondholders.”
Over the past two years, the Convention Facility Development Fund (CFDF) has generated excess funds that are dedicated to the early retirement of debt according to the terms of the DRCFA’s enabling legislation. The DRCFA used $32.45 million in excess CFDF proceeds to retire $30,375,000 in outstanding bond principal, saving state’s taxpayers $22.66 million. Combined with the estimated $30 million saved by the financing structure employed for the capital program and the $22.1 million saved from the defeasance of the 2003 bonds that were inherited from the City of Detroit, the DRCFA has saved state’s taxpayers an estimated $74.7 million just from financial management. This financial structure is saving state taxpayers $22.66 million and individual municipalities across the state are also benefitting, receiving their liquor tax back with an additional one percent interest premium.
“We are pleased by the progress that is being made toward paying down the bonds and the tremendous value it is bringing to taxpayers,” said Patrick Bero, Chief Executive Officer and Chief Financial Officer, DRCFA. “It is important for the DRCFA to continue to adequately respond to market demand. Our focus continues to be on saving taxpayers money and providing a world-class convention center for all of our visitors.”
Cobo Center had a record-setting year in 2017 with 497 event days and a 350 percent increase in revenue since 2009.
The DRCFA completed a $279 million renovation and upgrade to Cobo Center on time and within budget in August 2015. As a result of the renovation, Cobo Center has become more accessible, spacious and efficient in its use of space. The world-class convention center now offers spectacular views of the Detroit River and Canada, multiple new entrances, increased parking, public art and improved traffic flow to enhance visitor experience. Since the renovation, Cobo Center has increased the amount of bookings.
The DRCFA estimates an additional $30 million in capital projects towards maintenance and facility improvements at Cobo Center. These costs will be paid for through operating funds.
Located downtown on the beautiful Detroit Riverfront, Cobo Center is one of the largest convention centers in the nation and hosts nearly 1.4 million visitors annually.
About the DRCFA
On 9/15/09, operational control of Cobo Center transferred to the Detroit Regional Convention Facility Authority, under a collaborative agreement by the Michigan State Legislature, the City of Detroit, and Wayne, Oakland and Macomb counties. Each of these entities has an appointed member on the DRCFA Board. Larry Alexander is the appointee of the Governor of the State of Michigan and serves as Chairman of the Board. For more information visit: http://www.drcfa.org/.
About Cobo Center
With 723,000 square feet of exhibit space, Cobo Center boasts one of the largest contiguous exhibit floor spaces in North America and is the 17th largest convention center in the country. Visit online at www.cobocenter.com.
Founded in 1977, SMG provides management services to 233 public assembly facilities including convention and exhibition centers, arenas, stadiums, theaters, performing arts centers, equestrian facilities, science centers and a variety of other venues. With facilities across the globe, SMG manages more than 15 million square feet of exhibition space and more than 1.5 million sports and entertainment seats. SMG provides venue management, sales, marketing, event booking and programming, construction and design consulting, and pre-opening service. For more information visit www.smgworld.com.
Heather George, 313-832-2210, 248-417-5773 (mobile), [email protected]
Sara Campbell, 313-832-2210, 315-727-3280 (mobile), [email protected]